Republican politician Johnson denies intention for substantial Medicaid reductions, as GOP moderates exhibit signs of uncertainty.
WASHINGTON — Speaker Mike Johnson has shied away from one of the GOP's most aggressive proposals to slash Medicaid expenses, aiming to fund President Donald Trump's domestic agenda. This concession, made in response to pressure from politically vulnerable Republicans, underscores the fissures within the party threatening the plan.
Johnson, following a meeting with moderate Republicans, pointed out that the House Republicans had rejected the idea of decreasing the amount the federal government pays states for Medicaid beneficiaries gained through the Affordable Care Act's Medicaid expansion. Furthermore, he hinted at abandoning another method for reducing Medicaid spending, by transitioning from the current model of reimbursing states based on a percentage of beneficiaries' medical bills, to a flat rate per person.
"I think we're ruling that out as well, but stay tuned," Johnson said.
The retreat signified that many House Republicans considered the proposals, both of which would result in severe state budget shortages, politically untenable. This move also emphasized the challenges Johnson's conference faces in discovering Medicaid cuts that hit the spending targets Republicans set for themselves and will secure enough votes to pass.
Hardline Republicans swiftly objected, reiterating their opposition, and serving as a public reminder of the precarious balance Johnson is attempting to maintain. This show of resistance could jeopardize Trump's sweeping tax and spending cut plan in the House, where Johnson can only afford to lose a handful of votes.
"Well, I haven't ruled it out," said Rep. Chip Roy, R-Texas, on social media after Johnson's comments on dropping the idea of reducing payments for some Medicaid beneficiaries. "It's necessary to stop robbing the vulnerable to fund the able-bodied."
A coalition of 32 conservatives sent Johnson a letter the following day, warning that they would support the reconciliation bill only if it does not add to the deficit. This implies that, if Republicans do not succeed in finding substantial spending cuts, they will also have to accept a smaller tax cut to compensate.
"The deficit reduction target must be met with real, enforceable spending cuts - not budget gimmicks," they wrote in the letter, spearheaded by Rep. Lloyd K. Smucker, R-Pa., a member of the Ways and Means Committee.
House Republicans are striving to pinpoint approximately $2 trillion in spending cuts intending to offset the 2017 tax cuts they wish to extend and the new tax cuts they aim to include in their reconciliation bill. So far, the biggest challenge has revolved around the Medicaid program, which provides health insurance for 72 million low-income Americans.
The House budget plan calls for $880 billion in cuts from the committee that governs the program—a target that would be difficult to meet without significant changes. If House Republicans cannot agree on policies in line with the guidelines, the entire package may be doomed.
Opting to reduce federal funding for the program drastically by paying less to the 40 states (and DC) that have expanded Medicaid under Obamacare would have saved an estimated $710 billion over a decade, according to new estimates from the Congressional Budget Office (CBO). This move would put states in a precarious position, forcing them to contend with challenging decisions regarding coverage, benefits, or other sources of funding.
Nine states have passed laws that would require them to drop coverage for the expansion population if federal funding decreases, and three others would have to undergo immediate legislative review. Other states would need to find alternative ways to bridge the gap—by cutting benefits, reducing payments to medical providers, raising taxes, or truncating other state functions. Consequently, the CBO estimated that this policy would result in 5.5 million Americans losing their Medicaid coverage, and 2.4 million more becoming uninsured.
This Obamacare expansion extended health benefits to the adult, working-class population without disabilities, a demographic many Republican lawmakers consider less deserving of resources than other groups served by Medicaid, such as children, pregnant women, and nursing home residents. However, other Republicans view this population as a key constituency, as working-class voters have increasingly formed part of the party's electoral coalition.
Some conservatives, like Roy, have argued that uniting around dismantling the Affordable Care Act, a program despised by their party, should be the minimum for Republicans seeking to generate revenue for Trump's agenda.
"I've got a bunch of my colleagues running around saying, 'Well, we can't touch Medicaid,'” Roy said in a speech on the House floor. “Why can't we? Medicaid was expanded under Obamacare, which we all opposed, and the Medicaid expansion was a big reason why we opposed it."
However, many of Roy's colleagues, particularly those in politically contested seats, do not concur. The cuts would be especially devastating in wealthier, Democratic-governed states like California and New York, where Republicans have won districts where many constituents rely on Medicaid.
"I will never support cuts to Medicaid, Medicare, or Social Security that are not specifically aimed at reducing waste, fraud, or abuse," said Rep. Jeff Van Drew, R-N.J.
Yet, without any such cuts, Republicans are left with a diminishing set of options that would permit them to comply with their $880 billion target. Measures with widespread support across the caucus, like requiring beneficiaries to prove they are employed to retain their benefits, would not reduce spending significantly enough.
Another option under consideration, limiting taxes on hospitals and other complicated financing maneuvers that states use to amplify federal spending on the program, could disadvantage states with Republican leadership. According to CBO, this strategy would reduce the deficit by around $668 billion and lead to 3.9 million more individuals becoming uninsured.
Trump has recently expressed reluctance to make substantial Medicaid cuts and has reiterated several times that the program should not be altered. A White House official revealed that Trump is advocating for stronger discounts on prescription drugs used in Medicaid, a strategy that may alleviate some of the political obstacles but might not produce enough savings to abide by the budget language.
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Additional Insights
- Congressional Budget Office (CBO) Analysis: The CBO has provided detailed assessments of the fiscal and health coverage impacts of various Medicaid reform proposals, such as per capita caps and spending limits, decreasing federal contributions, and alternative measures. Their analyses project that these reforms could lead to substantial reductions in Medicaid enrollment, causing millions to lose coverage and increasing the uninsured population, particularly among previously insured, working-class adults.
- State Budget Strain and Response: The financial burden of reduced federal funding for Medicaid could create significant strain on state budgets, potentially leading to cuts in eligibility, benefits, or increased taxes. This, in turn, may impact the quality and availability of Medicaid services, especially in states governed by the Republican Party.
- Health and Mortality Consequences: Reduced coverage and policy measures like work reporting requirements could result in tens of thousands of deaths, according to some estimates.
- Legislative and Political Challenges: The GOP faces difficulties in striking a balance between meeting deep spending cuts and protecting Medicaid benefits for vulnerable populations. The social safety net program, which serves over 70 million Americans, is highly contentious and may be challenging to reshape significantly.
- Some ultraconservative Republicans continue to push for deep Medicaid cuts, while moderates within the party are expressing concerns over the potential for negative impacts on health-and-wellness services for millions of low-income Americans.
- Policy-and-legislation debates around the lowering of Medicaid expenses have highlighted the waste in the current system and the need for enforceable spending cuts that do not negatively impact the general-news population.
- The science-based consequences of reducing Medicaid spending, including increased mortality rates and worsening health outcomes, are a significant consideration in Medicaid policy-and-legislation discussions.
- Enforceable policies aimed at reducing waste and fraud in the Medicaid system could be a viable compromise for both ultraconservative and moderate Republicans, as they address fiscal concerns while minimizing potential harm to beneficiaries.
- With the upcoming policy-and-legislation battles over Medicaid spending and the reconciliation bill, it is crucial to ensure that any legislation adheres to the principles of sound science, health, and fairness for all Americans eligible for the Medicaid program.
